Modelling Net Zero New Zealand

A key aspect of the Net Zero NZ report is the requirement for a shift in land use, specifically a reduction in the amount of pastoral farming, especially dairy. That aspect of the report is seen as controversial, and unrealistic given the importance of the dairy industry to New Zealand’s economy. But the Net Zero report is not alone in calling for that shift. A recent OECD report on New Zealand’s environmental performance echoed that need to reduce the size of the New Zealand Dairy herd.

But is the change the reports are calling for really that drastic, especially given the 30-year timeframe we are talking about and given the much bigger changes that have already taken place in the industry. The world we live in has never resulted from a simple extrapolation of past practices, the unexpected always plays her part in making life unpredictable and interesting. So, even without the pressures of climate change, the industry will change over the next 30 years and no-one can really predict what those changes will be. What we can say however is that the changes described in the Net Zero report are not that big.

How Big a Change Really?

In June 1994, the number of dairy cattle in New Zealand was 3.8 million. By 2004, that had increased by 34 percent to reach just over 5 million. It increased by a further 30 percent over the next 10 years to reach 6.7 million in the middle of 2014.

A 75% change in 20 years. The Net Zero report envisages that these numbers will need to reduce to 6.4 million in the ‘Resourceful’ strategy and to 5.4 million in the ‘Innovative’ strategy. That is, a reduction over a period in excess of 30 years of just 11 percent for the ‘Resourceful’ strategy and20 percent for the ‘Innovative strategy. Given that the industry has undergone a 75 percent increase in a 20 year period, an 11 or 20 percent reduction in a period greater than 30 years does not seem such a big hurdle.If we wait however the task does become harder. Every year we wait to tackle the issues, the curve gets steeper. Our modelling shows that achieving a net reduction of 11 percent by 2050 only requires an annual reduction of just over 0.33% if we start now.That rises to 0.44% per year if we wait until 2025 and to 0.73% if we wait to 2035. A 20 percent reduction can be achieved with just over 0.61% reduction per year if we start now. But if we wait until 2025 that rises to 0.80% per year and to 1.33% per year if we wait until 2035.

The message in the microcosm of the dairy industry is the same as it is in the global context of climate change; the longer we wait to get started the bigger the change that is required. In this case, procrastination does not pay off. If you’d like to explore these scenarios further, or even try out your own scenarios have a look at our model.

What our modelling highlights, is that the Net Zero report is not proposing a change of momentous, or disastrous, proportions to the pastoral sector. Change yes, but a change that can be managed. Like it or not we will be forced to make the change as the pressures associated with climate change increase. So, we can allow climate disasters to be the drivers of the changes we will have to make or we can do it ourselves, by design.A design that, consistent with the ‘Doughnut Economics‘ approach I discussed recently ensures sustainable and profitable farms, with positive environmental, social and economic outcomes.

Reducing the Ecological Pressures

The benefits of addressing this issue go way beyond just helping address our greenhouse gases. Utilising the Doughnut model I talked of in my last perspective we can see that reducing the size of the dairy herd has a number of potential benefits. The first is the contribution to a reduction in GHGs. With agriculture making up 40% of those emissions it can no longer shirk its responsibilities. Reducing the size of the herd can also help reduce the nitrogen and prosperous loading on the land and given that, in recent years, the nitrogen balance has worsened in New Zealand more than in any other OECD country, changing that trend should be seen as a very positive benefit. A reduction can also help reduce the excessive water withdrawals, which are extremely high in comparison with other countries. It can also help our biodiversity by contributing to improving the state of our rivers so that they are not just ‘swimmable’ but ‘liveable’.

We know we are pushing the boundaries and in some cases beyond them and it behoves us a country to start shifting the arrows in the other direction and the dairy industry can make positive contributions to that task.

Doughnut Economics and the potential benefits of reducing the NZ Dairy herd

But why just focus on reducing the negative impacts. Surely, if we are proactive we can imagine a dairy industry that not only contributes to reducing our impact on the environment but is economically successful as well. That does require a shift, maybe one more difficult than a simple reduction in stock numbers. It requires that we stop equating lower stock numbers with lower economic benefits. It requires a shift to focusing on profit rather than volume.It requires shifting away from low-value commodity products to high-value products. That will not be easy given that there is so much industry infrastructure dependent on high volumes of low-value product flowing through it.It will not be an easy shift but a shift that we need to make. A sustainable Net Zero NZ future requires a dairy industry that is not a victim of international commodity prices, that produces cheeses, yoghurts and other high-value dairy products that are wanted around the world and, like an Otago Pinot Noir, are seen as offering something very special.Surely, that is a much better picture than containers of milk powder.

However, it will not happen if we see every attempt to address the very real issues as an attack on the dairy industry. It will also not happen if we ignore the science and the compelling need to reduce stock numbers.It will not happen if we assume that what has been successful in the past will continue to be successful in the future.

We can make the change, for the betterment of us all, if we lift our heads above the need to pump out volumes of milk powder, above the doctrine of growth at all costs, and start exploring a future that involves an innovative, technology rich, environmentally sustainable industry.

About the author

Dr David Rees

Dr David Rees has worked as a consultant since the mid-1980’s in the UK, NZ and Australia. He has specialised in applying the concepts, methods and tools of the system sciences in a wide range of industries and is a founding partner of Synergia, a successful research and consulting business with offices in Auckland and Sydney. His work over the last few years has focused on health, energy sustainability, and climate change.

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Against a gathering storm of population, climate and resource pressures, sustainable living has become an urgent challenge for everyone.

There is, however, a silver lining to this cloud – a growing awareness that environmental sustainability and economic growth are not mutually exclusive, and that significant opportunities await those who meet the challenge with speed, creativity and firmness of purpose.